Independent Banker - December 2021 - 70

CONNECTIONS TRAILBLAZER
" We believe [return on equity] is an
important consideration, because financial
health matters to us, but we also look at
where we maximize our social impact or
our environmental impact, and we optimize
across these triple bottom lines. "
-RANDELL LEACH, BENEFICIAL STATE BANK
community banks. " There's collective
learning and feedback that goes into
those standards, " he says, " so any
organization, including a bank, that
goes through that is going to learn a
lot. You do that a number of times,
and you embed it in your culture. It's
an incredibly powerful way to have
your organization adapt and grow
and be true to what you really want
to achieve. "
A 'powerful economic model'
Beneficial State Bank has a rather
unusual business model. Its primary
investor is the Beneficial State
Foundation, a financial justice
nonprofit that evaluates the bank's
impact and advocates for systemic
change within the industry. The
two organizations work hand in
hand, helping a broad group of
communities that they believe have
been left behind by the traditional
banking industry.
As of December 2020, the
foundation and the community
bank had made $33 million in
loans to women-owned businesses,
$275 million for affordable housing
projects and $135 million to the
environmental sustainability
sector. The bank recently set up a
branch inside the world's greenest
commercial building, the Bullitt
Center in Seattle.
" We go out and we do good things
in the community, " Leach says, " We
charge a fair economic return. We're
not trying to do anything extractive.
We want to make sure we provide
real value for folks. The return
from that value creation flows back
to the benefit of Beneficial State
Foundation, and the foundation is
governed in the public interest as
a nonprofit. That's a very powerful
economic model, and it also creates
some different entities to allow us to
tackle things a little bit differently. "
Leach believes all businesses should
look for opportunities in the crises
that face the world. " Any industry
that you're already in, [ask yourself],
'What are the opportunities to shift
it and have it be a force for good? " he
says. " I believe those institutions that
do take that paradigm shift will really
reap tremendous rewards financially,
but they'll also get tremendous
employee satisfaction. "
Roshan McArthur is a writer
in California.
66 Q ICBA Independent Banker Q December 2021
The first bank
union contract in
a generation
In March 2020, workers
at Oakland, Calif.-based
Beneficial State Bank did what
few bankers have ever done.
They unionized.
This September, they
ratified a union contract. The
terms included a minimum
hourly wage of $20.50 or
125% of the living wage
calculation, whichever is
higher, as well as a minimum
of two weeks' paid vacation
and up to 12 days of sick
leave. Beneficial State Bank
CEO Randell Leach believes
it's the first time that bank
workers have signed a union
contract in 40 years.
While fighting for a $15
federal minimum wage
alongside the Communication
Workers of America (CWA),
the bank found the two
organizations had common
values. So, when the union
approached it about talking
to its employees, Leach says
bank leadership was open to
the idea, remained neutral
and supported its employees'
right to self-determination.
" We've always believed
in workers' rights and
empowerment, " he says.
Independent Banker - December 2021

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